Abu Dhabi-backed Virgin Galactic eyes revenue of US$500m a year

Richard Branson’s Abu Dhabi-backed Virgin Galactic has seen “fantastic” interest from customers looking to book seats on its spacecraft and is looking to increase its revenue to around US$500m per annum within the next few years, the company’s CEO told Arabian Business in an interview.

“A few weeks ago we announced our 500 customer deposit, at $200,000 a ticket it signifies a milestone of over $100 million in future revenue. That business is just one piece of the overall commercial space travel market, [which is] worth billions of dollars overall,” said Virgin Galactic CEO George Whitesides.

Virgin Galactic, which Abu Dhabi state-backed investment firm Aabar Investments acquired a 32 percent stake in three years ago, is nearing completion of its first Spaceport in the US and last month announced plans to build Spaceport Abu Dhabi.

“We think the target market that we will be looking at soon will be the order of magnitude of about $500 million a year,” he estimated.

Whitesides said a third of its customers were based in the US, but spanned nearly 50 countries. Despite the global downturn, he said interest in space travel was still strong.

“We have found, for whatever reason, people have still been putting deposits down at roughly the same rate, is slowed down a bit in 2008 and last year it was fantastic,” he said.

Whitesides said once Spaceport American was operational in 2013, he believed the company could reduce the flight time between the US and the UAE to around an hour.

“It still won’t be cheap,” he admitted. “It will be used [initially for] high value package delivery, like if someone needs the transplant of a kidney or something like that. Like everything else, it will grow from there and eventually we will have people on it and it will be the earlier adopter, the wealthier people, who will be first.

“The real cost of transatlantic flight, if you do the current year analysis is around $80,000 when they were first starting out and it is almost the same order of magnitude as our current product.”

To show the company’s commitment to Spaceport Abu Dhabi, Whitesides announced last month Steve Landeene, a senior executive responsible for setting up Spaceport America in New Mexico, has been appointed to establish the company’s second base in the UAE.

“Under the 2009 deal the two companies agreed that Abu Dhabi would gain exclusive regional rights, subject to receipt of regulatory clearances, to host Virgin Galactic tourism and scientific research space flights," he said.

“In his new role, Landeene will be responsible for developing the roadmap for the construction of a spaceport in Abu Dhabi, starting from financial, strategic and organisational business planning and, if the requisite regulatory approvals are approved, moving through to spaceport construction management,” he continued.

Whitesides added that a location for Spaceport Abu Dhabi had not yet been selected and potential sites would be evaluated once the regulatory requirements had been finalised.

From 2007 to 2010, Landeene worked as executive director of the Spaceport America project. The world’s first commercial spaceport, the US$209m facility in southwestern US is now in the final stages of construction of the first of three phases, which will be completed later this year.

“The appointment comes at an exciting time. Virgin Galactic has a beautiful home at Spaceport America in New Mexico. We look forward to the day when Virgin Galactic spaceships will be flying above this vibrant and forward looking city,” Whitesides said.

“Perhaps one day to see a future generation of our spaceships to fly from here to Abu Dhabi to New Mexico in no more than an hour… The first city pair in which the globe is once again brought closer together for the benefit of us all,” he added.